One of Italy's biggest banks, Banca Monte dei Paschi, is often tout as the oldest bank in the world (Source: Getty)

Billy Bambrough

Italy’s most sound financial institutions have poured cash into a €5bn (£4bn) bailout fund for the country's vulnerable lenders in an attempt to calm investor fears over the stability of the beleaguered sector.

Shares in two of Italy’s most troubled banks bounced today however, with Monte dei Paschi di Siene and Banco Popolare shares climbing by 10 per cent before crashing back down to earth.

Monte dei Paschi erased its gains through out the day to close up just one per cent. Banco Popolare finished down by 0.75 per cent.

Following meetings with a vast number of institutional investors, banks, insurers, banking foundations and [state lender] Cassa Depositi e Prestiti, Quaestio has gathered many subscribers to launch the Atlante Fund.

UniCredit, Intesa Sanpaolo, and UBI Banca will contribute the lions share of the cash, with other banks, insurers and asset managers making up the remainder.